Is Google in more hot water over privacy?

I guess when information is your business, you’re going to come under close scrutiny for how you put that information to use. Google‘s business is information – gathering it, packaging it up, and making it available to users. When they were just indexing websites there wasn’t too much controversy, but with the arrival of products like Gmail, StreetView, Buzz and, latterly, Google+, the information they had on hand got much more personal. And people care about their personal information.

Google’s latest update to their privacy policy is designed to do away with the many, many policies they have and create one unified policy instead. Why? Well, imagine you get an email that reminds you to schedule a family get together, or to find that funny video to send to your sister. Google wants to be able to share information across all their products, like Gmail, Calendar, Search and YouTube to allow that sort of multi-system integration.

Or let’s say you constantly talk about Jaguar cars in Google+ and want to find out about the latest model in Google Search… Google hopes to better tailor your search results based on information in their other products – picking up the cars rather than the cats.

This combined policy is proving controversial, though, with various groups and individuals expressing concern. One of the major concerns is that the new policy is compulsory – if you want to keep using Google products you have to accept that your data will be shared between them.

My question is, is that so unusual? If a company updates their privacy policy, isn’t it normal that you should have to accept it to carry on using their services? Obviously this is a very large update, but I don’t see anything controversial about it being compulsory. Where it gets controversial is the potential for trying all those systems together creating situations where your information is unexpectedly exposed and, given Google’s prior form with privacy, I can understand people worrying about that.

What do you think about Google’s updated privacy policy? Should they have consulted with users, or is it fair enough to make the new policy compulsory? Is it a good idea to link all their products together to aid the flow of information? Or is that just too big a risk? I’m falling into the “fair enough” category, but I’d love to hear your thoughts in the comments.